Created: August 3, 2014
Modified: August 17, 2022

How Do Financial Advisors Get Paid?

On this segment of Better Money on WFSB, Eric Hogarth, CFP® and Kara Sundlun discuss financial advisors and the ways they are paid. While some advisors have a salary set by the firm that employs them, there are four main ways they get paid:

Fee Only

This is for someone who is managing and investing their own money but is looking for some advice. They usually pay the advisor an hourly fee or a flat rate.

Commissions

Advisors receive a percentage of the client’s investments as commissions. The negative aspect of this is that some advisors may get you to invest in something that will give them the largest profit, not necessarily doing what is best for you.

Fees based on the size of your account

Advisors are paid based on how the client’s account is performing. If the account goes down, the advisor makes less money. If the account goes up, the advisor is paid more.

Fees based on the percentage of account & percentage of profits

This is the most expensive option and usually occurs when the client is investing millions of dollars in just one account. The client pays a management fee, a percentage of what is in the account, no matter what. However, if the account goes up, the client also pays a percentage of the gain as well as the management fee.

  • Sandy and Thomas C.
    Sandy & Thomas C. are clients of Johnson Brunetti and received no compensation for their statement.

    “We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”

  • Robert G.
    Robert G. is a client of Johnson Brunetti and received no compensation for his statement.

    “We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”

  • Lisa D.
    Lisa D. is a client of Johnson Brunetti and received no compensation for her statement.

    “Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”

  • Ken D.
    Ken D. is a client of Johnson Brunetti and received no compensation for his statement.

    “I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “

  • Jeanne P.
    Jeanne P. is a client of Johnson Brunetti and received no compensation for her statement.

    “Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”

  • Anonymous
    This testimonial was provided by a client of Johnson Brunetti and received no compensation for their statement.

    “I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”

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